Strategies for Managing Tenant Problems

by Arnall Golden Gregory LLP
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Property managers are usually the first point of contact when tenant problems arise. As the facilitator of the landlord and tenant relationship, property managers must take steps to prevent, address and deescalate tenant concerns. Through AGG’s work with landlords, tenants, and property managers we have observed that property managers who implement the following practices are more successful in dealing with tenant issues, avoiding legal expenses, and staying on budget.

1. Establish Relationships. Proactively establishing relationships with tenants is invaluable. Taking the time to meet with tenants personally and attending tenant sponsored events establishes trust as well as an open line of communication. Therefore when an issue or concern arises, tenants are more comfortable approaching property managers to work toward a resolution.

2. Understand Tenants' Objectives and Challenges. Landlords and property managers will be better equipped to determine the appropriate strategy to take when addressing an issue if they understand tenants and their objections and challenges. For example, if a tenant is filing bankruptcy, instead of pursuing a remedy against such tenant, a landlord may be better served expending time and money marketing the premises or identifying a replacement tenant.

3. Be Proactive. Stay ahead of issues by proactively monitoring tenants. If a lease allows, monitoring gross sales is an effective method of keeping an eye on a tenant’s performance. If gross sales indicate that a tenant is struggling, the landlord and property manager may be able to work with the tenant to increase their success while simultaneously developing a strategy for dealing with a potentially vacant space. Similarly, stay familiar with the physical condition of the project and address maintenance and repairs items before the project’s tenants identify the need for such repairs and maintenance.

4. Review and Understand Leases. Have a working knowledge of key lease provisions such as notice, default, exclusive use and co-tenancy provisions in order to have a framework for communicating with tenants and enforcing landlord’s rights and tenants’ obligations. Leases often are signed and filed away. Effective property managers, though, are familiar with the rules and regulations dictated by relevant lease provisions governing the day to day interactions between a tenant and landlord. Further, when an issue does arise, follow the parameters of the lease so as to avoid escalating a matter.

5. Keep Communication Professional. It is critical to maintain a professional tone and demeanor. Landlords and property managers are most effective when they remain calm and professional when working to address an issue. Patience and the ability to empathize can go a long way in diffusing a situation. Acknowledge a tenant’s concerns and, when appropriate, communicate the steps landlord is taking and plans to take to resolve the issues. Finally, document calls or in-person meetings with a follow up letter or email.

6. Know When to Seek Third Party Advice. Recognize the value of communicating with your third-party advisors who can provide clarification, further guidance, and advice on steps to take to properly resolve an issue.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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